December, 2001

FIVE PICKS FOR A LONG-TERM PORTFOLIO by LARRY

This issue's assets for purchase consideration have been increasing in price and earnings lately and so have some possible short-term momentum factors in their favor. Nonetheless, their primary potential is for the long-term. They each appear to have an average safety rating. As a whole, they have low price-to-earnings (P/E) ratios. It is hoped that, in the next three-to-five years, their combined price appreciation could double that of the Standard and Poor's 500 or the Dow Jones Industrial Average.

Asset

FlemingCos.

Group 1Automotive

Hot Topic,Inc.

PacifiCareHealth

SyncorInternational

Symbol

FLM

GPI

HOTT

PHSY

SCOR

Recent Price

$26.25

$30.01

$26.60

$17.55

$28.09

Price toEarnings (P/E)

11.4

12.0

19.7

6.8

17.4

Industry

FoodWholesalers

Retail(Special Lines)

Retail(Special Lines)

MedicalServices

PharmacyServices

Interestingly, our earlier recommended bargain stock, Fruit of the Loom (FTLAQ), one whose subsequently plummeting price shows the value of diversification, has been again in the news. Warren Buffett's Berkshire Hathaway (BRK.A; BRK.B) is purchasing the company's entire apparel business for just under one billion dollars. The deal is expected to be consummated in the first quarter of 2002.

Buffett said of the venture: "We agreed to buy Fruit of the Loom for two major reasons: the strength of the brand and the managerial talent of John Holland."

DISCLAIMER

Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)